Bitcoin Exchange Whale Ratio Hits New High Since 2022 — Impact On Price?

Based on price action data, the last two weeks in October are the most bullish period in the Bitcoin price history. However, why that hasn’t been the story for the premier cryptocurrency over the past two weeks seems to be the question on every investor’s mind. The price of BTC has failed to capitalize on its recent bullish momentum, falling to as low as $65,000 at some point in the past week. Interestingly, the latest on-chain observation suggests that this period of sluggishness might not be over yet for the market leader.

In a recent Quicktake post on the CryptoQuant platform, an on-chain analyst pointed out that the Bitcoin “Exchange Whale Ratio” has seen a notable surge in recent weeks. The “Exchange Whale Ratio” metric measures the ratio between the sum of the top 10 largest transfers into centralized exchanges and the total exchange inflow.

For clarity, it is assumed that the 10 largest inflows into exchanges are executed by whales, which are entities that wield significant influence on the market due to their substantial crypto holdings. The Exchange Whale Ratio basically assesses the level of activity of this cohort of investors compared to the rest of the market.

A high Exchange Whale Ratio indicates that the top 10 largest exchange inflows dwarves the incoming transfers from the rest of the market. On the other hand, when the value of this metric is low, it suggests that the whales only make up a relatively healthy part of funds flowing into centralized exchanges.

According to data from CryptoQuant, the seven-day moving average of Bitcoin’s Exchange Whale Ratio recently reached its highest value since November 2022.

The Quicktake analyst pointed out that the spike in this metric could be bearish for the value of the flagship cryptocurrency, as it implies that whales might be putting a significant amount of selling pressure on the market. Inflows into centralized exchanges typically have a bearish impact on the Bitcoin price, as selling is one of the services offered by these platforms. Moreover, whales moving their funds to trading platforms can set off a sell-off cascade, as other investors often watch their moves due to their market influence.

As of this writing, the price of Bitcoin stands around $66,700, reflecting an almost 2% decline in the past 24 hours. This single-day performance underscores how sluggish the premier cryptocurrency has been in recent days. According to CoinGecko data, the price of BTC is down by over 3% in the past week.